Friday, July 25, 2014
PLACERVILLE, CALIFORNIA
99 CENTS

What’s keeping buyers awake at night?

By
From page HS4 | August 23, 2013 |

When I checked my e-mail one day last week there was a note from a family that I had recently been working with trying to find them a home. “Sorry Ken, we need to take a break from shopping for a home. The experience is just too stressful and keeping us awake at night.”

I was a little disappointed but not surprised. They were first-time buyers with a limited down payment. Despite some past credit issues, they had been pre-qualified by a local lender for a FHA loan. We had already made two unsuccessful offers on homes. They were understandingly disappointed and frustrated with the process. I had cautioned them early that finding a suitable home in their entry-level price range wasn’t going to be easy but if they would just follow my advice and work at the home buying process, they would eventually end up with a home.

Briefly I thought about calling them and applying a little sales pressure to change their mind. After all, I knew all the excuses that buyers have for not moving forward and the sales skills to overcome their reluctance. Although I had likely trained a thousand agents on “Overcoming Buyer’s Objections” I was my worst student. Either folks wanted to buy a home or not. These folks had decided not at this time and so I would give them space and follow up in a few weeks to see what’s up.

Buying a home and going through the loan process is right up there on the stress level just below death, divorce and job loss. But despite the mental anguish, millions of families go through that process each year. This last year has been especially stressful for buyers facing a limited selection of homes, multiple offers and increasing interest rates.

A new survey conducted by Trulia and Harris Interactive provides an interesting view as to how buyers see the housing market today. The survey identifies what’s keeping buyers awake at night. If you or someone you know has recently purchased a home, perhaps you can identify with these leading sleep disorders.

The most common worry among home buyers is that mortgage interest will go up before they buy. While there are some things in life we can control, interest rates are not one of them. Yes, interest rates are more likely to go up in the future than down but let’s get a grip and add a little prospective. Mortgage interest rates below 6 percent are of historical significance. Over the last 42 years, it has only been since late in 2004 that the interest rate for 30-year fixed loans has been less than 6 percent. Mortgage rates are predicted to increase but remain below 6 percent through 2015.

One in three buyers are losing sleep, worried they will not find the house they really like. True enough, there are not enough perfect houses ideally suited for every buyer. So what? Start somewhere. One of the advantages of owning versus renting is homeowners can customize their own home to their preferences and lifestyle. Often, settling for less than our expectations has its own rewards.

One-third of buyers are losing sleep worrying that prices will go up before they buy and one-quarter of survey respondents can’t sleep because they worry home prices will fall after they buy. These two groups of worriers should get together in a late night Internet chat room. Home prices will go up and down. In the long term, equity is built by paying down the mortgage with deflated dollars. Inflation increases the value of real estate and decreases the value of currency.

Not qualifying for a mortgage was cause for 30 percent of homebuyers to lie awake at night. The loan process is more complicated and costly than what it used to be back in the day when all that was required for a loan was a pulse. Today, income, asset and employment documentation is endlessly reviewed and updated. However, the initial pre-approval process is pretty quick. If a homebuyer doesn’t have a written loan approval they shouldn’t be shopping for a home. Borrowers will feel more comfortable with the loan process if they have a dialog going with a reputable local mortgage professional. This group of restless sleepers needs to get off the Internet constantly searching for the lowest rates. The Internet is great for information but lacks the personal assurances that only a personal friend in the mortgage business has to offer.

Twenty-seven percent of homebuyers worry about competing with other offers. Unfortunately for buyers, multiple offers are the new reality. Buyers need to make their best offer possible and be mentally prepared to move along to another home if their offer isn’t acceptable.

Often the stress that comes with buying a home can be avoided. Anxiety is created when we do not understand the process, or we are not mentally prepared or sufficiently motivated to enter the playing field. Some apprehension, however, is good. We are genetically inclined to be cautious of the unknown. But if buying a home is keeping you up at night, drink a glass of warm milk and call your agent in the morning.

Ken Calhoon is a real estate broker in El Dorado County. He can be reached at kencalhoon.com.

Comments

comments

.

News

Accident: 1 bullet hits 2

By Cole Mayer | From Page: A1

 
 
Scaffolding issue makes for contentious meeting

By Wendy Schultz | From Page: A1, 2 Comments | Gallery

 
District 2: Candidates debate jobs versus lifestyle

By Dawn Hodson | From Page: A1, 2 Comments | Gallery

Help available for breastfeeding mothers

By Health and Human Services Agency | From Page: A3

 
El Dorado County School Board vacancy

By El Dorado County Office of Education | From Page: A8

 
.

Opinion

The weekly Daley: A good time to be there…

By Chris Daley | From Page: A4

 
Something to think about: More than what you see

By Wendy Schultz | From Page: A4

Popular science

By Mountain Democrat | From Page: A4

 
.

Letters

Watch whom you’re calling ‘conservative’

By Letters to the Editor | From Page: A5Comments are off for this post

 
Fake ‘small farms’ steal from residential EID customers

By Letters to the Editor | From Page: A5Comments are off for this post

People of Placerville

By Letters to the Editor | From Page: A5

 
Computer scam phone calls

By Letters to the Editor | From Page: A5

Support of Director Prada

By Letters to the Editor | From Page: A5

 
Uphold the Third Amendment

By Letters to the Editor | From Page: A5

Bureaucracy

By Letters to the Editor | From Page: A5, 1 Comment

 
Imagination Theater’s play

By Letters to the Editor | From Page: A5

.

Sports

Quarter century later, Rypien wins ACCG again

By Andrew Hazard | From Page: A6 | Gallery

 
Outside with Charlie: Paddle time

By Charlie Ferris | From Page: A6

Midget Lites join tomorrow’s action

By Bill Sullivan | From Page: A6

 
El Dorado rallies for last-inning victory

By Mike Bush | From Page: A6

Sports Scene: July 24, 2014

By Democrat Staff | From Page: A6

 
Rush sit a win from Series

By Jerry Heinzer | From Page: A7

Tasmanian Devils go undefeated

By Patty Pope | From Page: A7

 
.

Prospecting

El Dorado wines win in Amador

By Democrat Staff | From Page: B1

 
Suds entice the taste buds

By Krysten Kellum | From Page: B2 | Gallery

Things to do: July 25, 2014

By Democrat Calendar | From Page: B2

 
Have an Hawaiian vacation at Carson Road wineries

By Carson Road Winery Asociation | From Page: B3Comments are off for this post | Gallery

Rhythm and Views goes bluesy

By | From Page: B3

 
Summer fun is happening in Twain Harte

By Fire On | From Page: B4Comments are off for this post

Manzanita doubles the music

By Table Nectar And Manzanita | From Page: B5

 
Recording artist at Busby Cellars

By News Release | From Page: B6

Hands4Hope hosts school supply drive

By News Release | From Page: B6

 
Supergroup plays Harris Center

By Carrera Productions | From Page: B6

Artists invited to go western

By Art On The Divide | From Page: B7

 
Visit Tahoe artists during tour

By Special to the Democrat | From Page: B7

Reggae on the River celebrates 30 years

By Reggae On | From Page: B7Comments are off for this post

 
.

Essentials

Lake levels 7-24-14

By Michael Raffety | From Page: A2

 
Crime Log: July 11-13

By Cole Mayer | From Page: A2

Building permits 7/7-11/2014

By Michael Raffety | From Page: A2

 
.

Obituaries

Wallace Murrel Thomas

By Contributor | From Page: A2

 
.

Real Estate

How to have a garden party, minus the whining

By Marni Jameson | From Page: HS3

 
Most common mistakes homebuyers make

By Ken Calhoon | From Page: HS4

.

Comics

Working It Out

By Contributor | From Page: A9

 
Shoe

By Contributor | From Page: A9

Sudoku

By Contributor | From Page: A9

 
Rubes

By Contributor | From Page: A9

TV Listings

By Contributor | From Page: A9

 
Speed Bump

By Contributor | From Page: A9

Tundra

By Contributor | From Page: A9

 
Horoscope, Friday, July 25, 2014

By Contributor | From Page: A10

New York Times Crossword

By Contributor | From Page: A10

 
Horoscope, Sunday, July 27, 2014

By Contributor | From Page: A10

Horoscope, Saturday, July 26, 2014

By Contributor | From Page: A10

 
.

Home Source

How to have a garden party, minus the whining

By Marni Jameson | From Page: HS3

Most common mistakes homebuyers make

By Ken Calhoon | From Page: HS4